business, failure, project, management

Business strategy failures are project management failures

business, strategy, project management, failures

Retreat! Retrench! Blame others! Not to project, but business failure seems linked to management failures

The essence of strategic change is not a new direction, but a series of directives. What to start, what to stop, and what to continue comes from the strategic plan. That plan really acts as a road map or charter for change.  A plan not carried out is a project failure for the business.

The difficulty of strategy implementation is a recognized challenge and a Booz Allen* study concluded that 73% of managers believe that the difficulty of implementing strategy far surpasses that of formulating it.

Plan, Do, Check, Fact

Business strategies that fail are really project management failures and the essence to manage a successful project is as much about managing behavioral change as operational change.  Planned change refers to a premeditated, agent-facilitated intervention intended to modify organizational functioning for a more favorable outcome (Lippit, Watson, and Westley 1958).

While an executive view of strategy may distill itself through changes to the operating model and cost structure only lasting change is achieved with a cultural, change initiative.  Research suggests that between 66% and 75% of organizational culture change efforts fail**.

One of the most challenging and unresolved problems in this area is the ‘apparently high’ percentage of organisational strategies that fail, with some authors estimating a rate of failure between 50 and 90 percent (e.g. Kiechel, 1982, 1984; Gray, 1986; Nutt, 1999; Kaplan and Norton, 2001; Sirkin et al., 2005). By failure we mean either a new strategy was formulated but not implemented, or it was implemented but with poor results.

I began the look at project management in a prior post on mergers and acquisition failures are project management failures.  I don’t think I need to lay a scientific study for business strategy failure as I this blog would devolve.  Your organization experience in business strategy failure provides the most sound case for concern.

Business #ProjectFail

For executive strategy adoption to gain organization hold, a series of directives, directly rely on people starting new behaviors, stopping old habits, and continuing the best of what they have done. An organization can succeed with strategic change only with success at cultural change.

Business strategy needs so much more understanding than the unfreezing-movement-refreezing framework that is conceptually sound, but empirically challenging.  An organization will not succeed implementing a new strategy without success implementing culture change and a culture change relies on understanding the scope, constraints, and risk with organization culture before launching the effort.

Three features of implementation success, as defined by Miller (1997) include:

  1. completion of everything intended to be implemented within the expected time period;
  2. achievement of the performance intended; and
  3. acceptability of the method of implementation and outcomes within the organization

Like any human undertaking, projects are performed and delivered under certain constraints.  Consistent with project management’s project constraints for success implementation success can overlay nicely:

  1. time (completion)
  2. budget (achievement)
  3. scope (acceptability)

Project #BusinessFail

The issue for business strategy failure may be less about strategy and more about the people who develop the strategy.  Traditionally, only top executives make and develop strategy.  However, only those most in touch with organization culture understand the endeavor ahead to take goals, objectives, and actions and change behaviors, minds, and motivations.

Increase the likelihood to successfully implement a business strategy when you:

Strategy affects how things will get done.  Culture, is quite simply, how things are done.  After all, it’s not business it’s personnel.

No doubt I got some things wrong, or left out some important ideas. Please let me know what you think and suggestions you have for me to add value.

* referenced in:   Excellence is Born out of Effective Strategic Deployment: The Impact of Hoshin Planning [.pdf]

**Alexander, 1985; Wernham, 1985; Ansoff and McDonnell, 1990

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Comments 2

  1. Hi Toby, I’m a bit behind on my Google Reader reading list, but here’s a few comments regarding your post above.

    I am not intuitively inclined to accept the assertion that Strategic Failures are positively correlated with Project Failures. This correlation needs to be not just explained (at the logical level) but also demonstrated (at the observational level).

    Although I suspect this point is fairly clear in your mind, I can’t see how you arrive at the conclusion that “Business strategies that fail are really project management failures”. Business Strategies, unlike projects, are not one-off endeavors, and do not lend themselves to a natural end-date. With that in mind it is clear that projects are often a tool used to implement and execute certain business strategic objectives, and as such it is very possible to run a successful project that successfully implements a failed strategy. This, for me, is the litmus test for the correlation between the two. The failure of the former (Business Strategy) is not dependent on failure of the latter (project).

    I wonder what your thoughts would be regarding the argument above.

    Cheers, Shim.
    http://www.quantmleap.com

    1. When I’ve designed or implemented a strategy, I’ve created a series of goals, objectives, and actions. A strategy without goals, objectives, and actions is merely paperwork.

      If I look at each goal I need to have a series of time-bound and measurable projects that tell me what I will do, how I will do it, and when will I get it done. These fail, the strategy fails.

      As strategy is living and a series of time-bound projections, I see strategy as a program or portfolio of options. This approach has made sense to the people I’ve worked with and amps up the expectation of a mere exercise to a living moveable quality criteria to organization existence.

      Other than ongoing operations, I view everything within an organization as a project, program, or portfolio to be managed towards your organization’s relevance.

      I believe the last competitive advantage, aside from talent management, is the way an organization reliably delivers on projects. The organization that can consistently deliver within scope, budget, and time is the organization that has competitive advantage.

      Am I looking for a statistical confidence interval from a population of valid and reliable samples to make a scientific/academically valid law, nah, I am just trying to tease out the importance of delivering projects to the C-level folk as well as the project teams.

      Nothing worse than being tapped to join a project that you know will fail, like the many projects that failed in the past.

      You keep me honest Shim and I appreciate your view and your comments, always. Don’t know if this answer is sufficient, but hope it clarifies a bit more of my point.

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